The institution recommended that the DGII resolve these issues to prevent this instrument from becoming a regulatory barrier that discourages the entry of new players into the markets and affects the dynamics of free and fair competition, as well as the rights of users, and from being subject to discretionary application by the various tax administration agencies, which would generate uncertainty in those who would be subject to compliance with said regulation.
SANTO DOMINGO- The National Commission for the Defense of Competition (ProCompetencia) detected ambiguities in the issues of transportation and accommodations in the draft regulations for the application of the Tax on the Transfer of Industrialized Goods and Services (ITBIS) to providers of digital services abroad prepared by the General Directorate of Internal Taxes (DGII).
The institution recommended that the DGII resolve these issues to prevent this instrument from becoming a regulatory barrier that discourages the entry of new players into the markets and affects the dynamics of free and fair competition, as well as the rights of users, and from being subject to discretionary application by the various tax administration agencies, which would generate uncertainty in those who would be subject to compliance with said regulation.
He warned that if the inaccuracies persisted, it would alter the principle of fiscal neutrality because local providers of digital services would be given differentiated and advantageous treatment compared to digital services provided from other countries.
The agency understands that it is necessary to specify the treatment that will be given to suppliers domiciled or resident in the country who venture into the provision of the indicated services, in order to avoid possible adverse repercussions.
He stated that, although the draft wording does not stipulate that the cost of the tax will have to be borne by the local consumer, he will pay it in the digital service he consumes.
According to a statement sent to the media, the observations are contained in a communication sent on March 16, 2022 to the Director General of the DGII, Luis Valdez, by the President of the Board of Directors, María Elena Vásquez Taveras, after being unanimously approved by the body made up of Gianna Franjul, Víctor Mateo, Iván Gatón and Juan Reyes.
Article 20 of the General Law for the Defense of Competition of 2008 establishes that administrative acts intended to issue regulations or to resolve administrative sanctioning processes brought before other market regulatory bodies other than the Commission, provided that they are related to the purpose of this law, should be sent to the Commission for its examination together with the supporting documentation.
Suggestions
The state body has suggested that the DGII appeal to the Dominican Institute of Telecommunications (Indotel), in its capacity as a regulatory body, to evaluate the principle of equity when taxing digital services with that or any other tax.
It points out that Article 4 of the draft identifies as obligated parties companies and individuals not resident or domiciled in the Dominican Republic that provide some of the digital services, and that are used in the national territory, but it does not refer to the applicability or not of the ITBIS to similar services provided through the internet by local providers to be consumed within the national territory, as happens with Corotos.com, LaPulgaRD.com, PedidosYa.com.do.
Regarding the topics of land transport and accommodation mediated by digital services, the agency analyzed the following aspects: scope of application, implementation mechanism for digital services, application to accommodation services mediated by digital means, application to transport services mediated by digital means, and determination of the taxable base of the tax on digital services.
Source:ListínDiario
